May 12, 2006

Budget Update

May Revision Released by Governor Schwarzenegger

Governor Schwarzenegger has released his May Revision for the 2006-07 Budget Year. 

Following is the Governor's summary for K-12 Education:

Strong performance by the California economy presents a historic opportunity to make significant additional state investments in K-12 schools to revitalize California's system of public education. These additional resources provide an opportunity for all Californians to unite behind their public schools. Therefore, the Administration proposes to make strategic investments by targeting significant new resources to critical educational priorities that require statewide leadership and focus. At the core of the Administration's priorities is maintaining the state's standards-based reforms in professional development, instructional materials, testing and accountability programs. These reforms are the key to ensuring that all California children have access to high quality instruction that will pave the way toward success in life.

Building on this essential foundation, the Governor has championed the restoration of programs necessary for a well-rounded education; the arts, music, career technical education and physical education. Under the Administration's proposal, schools would receive significant one-time and ongoing resources to purchase equipment and hire staff to ensure all students have access to these programs.

Furthermore, the Governor believes that true educational reform and improved academic achievement result from leadership and ingenuity at the local level. That is why the May Revision proposes a total of $2.3 billion in new discretionary spending above levels contained in the 2005-06 state budget. These resources are provided as cost-of-living adjustments, deficit reduction funding and revenue limit equalization funding. These funds will provide local educators with the flexible resources to craft specific solutions to help their students succeed.

Finally, in an effort to resolve the pending lawsuit regarding Proposition 98 funding, the Administration is proposing to calculate the Proposition 98 guarantee consistent with the legislative intent language contained in Chapter 213, Statutes of 2004. As a result, the state will pay $3 billion in settle-up funding, comprised of approximately $1.7 billion and $1.3 billion to count toward the 2004-05 and 2005-06 Proposition 98 guarantees for those years. In order to provide resources for the initial years of the settlement schedule, the May Revision proposes legislation to authorize the refinancing of the Golden State Tobacco Securitization Corporation's 2003A bonds. This refinancing involves a new structure for utilizing the tobacco settlement payments in a way that will generate additional proceeds of $900 million for the state without jeopardizing payments to the existing bondholders.

Ongoing Programs

The May Revision proposes strategic ongoing investments in the areas described below. These major initiatives will help to restore crucial educational services that have been reduced or eliminated in recent years and also lay the groundwork for important new efforts. Along with the initiatives contained in the Governor's Budget, these investments will help guide the way to major improvements in California's public schools.


EXPANSION OF THE ARTS AND MUSIC BLOCK GRANT
The May Revision proposes an increase of $66 million Proposition 98 General Fund to expand the Arts and Music Block Grant proposed in the Governor's Budget, for a total of $166 million. This increase will allow for expansion of the block grant to high schools and increases the per pupil rate to $25. The Administration continues its commitment to improving cognitive development and educational outcomes by increasing educational opportunities for art and music. These funds will be distributed to school districts, charter schools, and county offices of education for supporting standards aligned instruction in kindergarten through grade twelve and will also be available for uses that include hiring additional staff, purchasing materials, books, supplies and equipment, and staff development. Funding will be allocated at a rate of $25 per pupil, with a minimum of $3,000 for school sites with ten or fewer students and a minimum of $5,000 per site with more than ten students.


SCHOOL COUNSELORS FOR GRADES SEVEN THROUGH TWELVE
The May Revision provides $200 million Proposition 98 General Fund to increase the number of school counselors that serve seventh through twelfth grade students. These funds are intended to supplement, not supplant, existing counseling resources and improve the ratio for middle school students to 500:1 and 300:1 at high schools. Moreover, unlike existing counseling services that only provide students with academic counseling, these new counselors will provide students with information on all educational and vocational options available to them.


TARGETED PRESCHOOL INITIATIVE
The May Revision proposes $50 million Proposition 98 General Fund for the first phase of a $145 million expansion for 4-year olds from low-income families residing in school districts in the lowest three deciles of the Academic Performance Index. This expansion will also include quality reforms designed to promote family literacy. Research demonstrates that children from low-income families benefit the most from access to quality preschool. The expansion will be phased in over a three-year period, which will allow school districts to address facility needs and to build capacity by hiring new teachers.

In addition, the May Revision provides an increase of $50 million one-time Proposition 98 General Fund in the Child Care Facilities Revolving Fund to address facility needs for the preschool expansion.

ONE TIME PROGRAMS

INSTRUCTIONAL MATERIALS GRANTS
The May Revision provides $250 million Proposition 98 General Fund for the purchase of standards-aligned instructional materials and supplemental materials. High-quality instructional materials for every student are a fundamental building block of a strong educational program and are required under the Williams settlement. These resources will help schools fill gaps in their instructional material programs and replace lost textbooks. Additionally, to the extent schools have purchased standards-aligned materials for the four core subject areas, these funds will enable districts to purchase effective supplemental materials. Grants will be allocated to school districts and county offices of education on an equal amount per pupil based on the number of pupils in kindergarten and grades one through twelve.


ARTS AND MUSIC EQUIPMENT AND SUPPLIES GRANTS
The May Revision provides $250 million Proposition 98 General Fund for the purchase of Art and Music equipment and supplies. These one-time grants will allow K-12 schools to restore and expand the infrastructure of art and music programs. With these resources, schools will be able to make significant investments in items such as musical instruments, kilns, photographic equipment and multi-media design equipment.


PHYSICAL EDUCATION EQUIPMENT GRANTS
The May Revision provides $250 million Proposition 98 General Fund for the purchase of physical education equipment and supplies. This significant infusion of resources will allow schools to make meaningful investments in order to improve and expand the infrastructure of physical education programs. Grants will be allocated to school districts and county offices of education on an equal amount per pupil based on the number of pupils in kindergarten and grades one through twelve.


TEACHERS' FUND FOR CLASSROOM SUPPLIES AND MATERIALS GRANT
Across the state, teachers oftentimes dip into their own pockets to pay for classroom supplies, laboratory supplies and other materials they need to do their jobs. It is well-documented that most K-12 teachers spend hundreds and even thousands of dollars per year of their own money on items ranging from paper and glue sticks to lab supplies and printer cartridges. The May Revision provides $400 million Proposition 98 General Fund to help alleviate this burden on teachers. These resources will be allocated to school districts and county offices of education serving pupils in kindergarten through grade twelve and must be used to purchase classroom supplies and materials. Funds must be used to establish discretionary classroom supply and material accounts for each classroom teacher.


CLASSROOM AND SCHOOL LIBRARY READING BLOCK GRANT
The May Revision provides $75 million Proposition 98 General Fund for the purchase of school library materials. School libraries foster literacy by allowing students to read stories and explore information that matters to them. In addition, school libraries play a vital role in promoting academic achievement and providing instructional support. The resources provided in the May Revision will help to replenish and refresh both school and classroom library materials. Of the $75 million, $25 million is reserved for kindergarten through grade four and $50 million for grades five through twelve.


CAREER TECHNICAL EDUCATION EQUIPMENT AND MATERIALS BLOCK GRANT
The May Revision provides $50 million Proposition 98 General Fund for the purchase of career technical education equipment and materials. These resources will be allocated to school districts, regional occupational centers/programs, adult education providers and county offices of education to the extent they offer career technical education. Funds will be distributed on an equal amount per pupil based on the number of pupils in middle and high school.


MATHEMATICS TEACHER PILOT PROGRAM
In addition to the Governor's Math and Science Teacher Initiative, the May Revision includes $1.8 million Proposition 98 General Fund for a pilot program to establish essential links between higher education and secondary-level math programs. This will complement the Governor's Initiative and further reflects the Administration's commitment to addressing the shortage of math teachers. The goal of the Mathematics Teacher Pilot program is to improve the level of mathematics instruction in California by both ensuring that there are quality math instructors in secondary schools to increase student proficiency and by encouraging upper-level college math majors to enter the teaching profession in districts most in need.


K-12 HIGH SPEED NETWORK
The May Revision includes $5 million one-time Proposition 98 General Fund for the "last mile" which will enable all remaining California schools, districts, charter schools and county offices of education to connect to the K-12 High Speed Network. The proposed funds will be allocated based on need, with priority to be given to districts that are not yet connected.

The May Revision also authorizes $15.6 million to support the K-12 High Speed Network, including $8.6 million Proposition 98 General Fund, $3 million from existing reserves and $4 million from excess funds in the equipment refresh account. These funds will allow the K-12 High Speed Network to continue the work of ensuring cost-effective Internet and other communication services for all California schools.

We will provide more detail over the weekend.

~Dave Walrath